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Columbia Banking System Announces First Quarter 2022 Results and Quarterly Cash Dividend

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Columbia Banking System reported a strong first quarter 2022 with a net income of $57.5 million and diluted earnings per share of $0.74, despite a $0.07 per share impact from acquisition-related expenses. The company achieved record non-PPP loan production of $464.2 million, and deposits rose by $289.1 million. The net interest margin increased to 3.12%. A regular cash dividend of $0.30 per share will be paid on May 18, 2022, to shareholders of record by May 4, 2022.

Positive
  • Quarterly net income increased to $57.5 million.
  • Record non-PPP loan production of $464.2 million.
  • Deposits grew by $289.1 million.
  • Net interest margin rose to 3.12%.
  • Regular cash dividend of $0.30 declared.
Negative
  • Acquisition-related expenses negatively impacted earnings by $0.07 per share.
  • Total noninterest expense increased by $2.4 million from the linked quarter.

Notable Items for First Quarter 2022

  • Quarterly net income of $57.5 million and diluted earnings per share of $0.74, which included $0.07 per share negative impact from acquisition-related expenses
  • Record non-PPP first quarter loan production of $464.2 million
  • Deposits increased $289.1 million
  • Net interest margin of 3.12%, an increase of 7 basis points from the linked quarter
  • Nonperforming assets to period-end assets ratio decreased to 0.09%
  • Regular cash dividend declared of $0.30 per share
  • Bank of Commerce Holdings integration completed

TACOMA, Wash., April 21, 2022 /PRNewswire/ -- Clint Stein, President and Chief Executive Officer of Columbia Banking System, Inc. ("Columbia", "we" or "us") and Columbia Bank (the "Bank") (NASDAQ: COLB), said today upon the release of Columbia's first quarter 2022 earnings, "We achieved robust loan and deposit growth during the first quarter, which is traditionally our slowest. Our credit metrics remain stellar, and our balance sheet is well-positioned for the expected continued rise in interest rates." He continued, "During the quarter our team completed the Bank of Commerce Holdings integration and is ready for the close of our merger with Umpqua Holdings. I am proud of what our bankers continue to accomplish and remain exceedingly optimistic for our future."

Balance Sheet

Total assets at March 31, 2022 were $20.96 billion, an increase of $18.6 million from the linked quarter. Loans were $10.76 billion, up $117.7 million from December 31, 2021, mainly attributable to loan originations of $464.2 million partially offset by loan payments. Total Paycheck Protection Program ("PPP") loans decreased from $184.1 million at December 31, 2021 to $83.2 million at March 31, 2022. The remaining PPP loans balance consisted of $9.1 million from the first round in 2020 and $74.1 million from the second round in 2021. Debt securities in total were $7.73 billion, a decrease of $329.5 million from $8.06 billion at December 31, 2021 substantially driven by fair value movement related to the available-for-sale portfolio. Total deposits at March 31, 2022 were $18.30 billion, an increase of $289.1 million from December 31, 2021. The deposit mix remained fairly consistent from December 31, 2021 with 48% noninterest-bearing and 52% interest-bearing.

Chris Merrywell, Columbia's Executive Vice President and Chief Operating Officer, stated, "We have been successful in retaining existing and attracting new bankers in all of our markets, which generated loan production of $464.2 million, a new non-PPP first-quarter record. This, combined with increased account retention, translated into excellent loan and deposit growth during the first quarter, which typically is our seasonally lowest." He continued, "Our pipelines remain strong which is an extension of the purposeful investment in our people and our products."

Income Statement

Net Interest Income

Net interest income for the first quarter of 2022 was $146.2 million, an increase of $677 thousand from the linked quarter and an increase of $22.2 million from the prior-year period. The increase from the linked quarter was primarily due to higher interest income related to increased yield on the securities portfolio substantially driven by lower premium amortization. Also contributing was lower interest expense resulting from the $35.0 million repayment of subordinated debentures in the prior quarter. The increase in net interest income from the prior-year period was mainly due to an increase in interest income for loans and securities, which was a result of higher average balances partially related to the Bank of Commerce acquisition. For additional information regarding net interest income, see the "Net Interest Margin" section and the "Average Balances and Rates" tables.

Provision for Credit Losses

Columbia recorded a $7.8 million recapture for credit losses for the first quarter of 2022 compared to an $11.1 million provision for the linked quarter and a net provision recapture of $800 thousand for the comparable quarter in 2021. The recapture for credit losses recorded in the current quarter was due to credit quality improvement.

Noninterest Income

Noninterest income was $24.2 million for the first quarter of 2022, a decrease of $60 thousand from the linked quarter and an increase of $1.0 million from the first quarter of 2021. The decrease compared to the linked quarter was primarily due to lower loan fees and mortgage banking revenue partially offset by financial services and trust revenue and other noninterest income including a gain on the sale of loans of $868 thousand. The increase in noninterest income during the first quarter of 2022 compared to the same quarter in 2021 was mainly due to increases associated with other noninterest income, financial services and trust revenue and card revenue offset by lower mortgage banking revenue due to lower overall mortgage production and decreased premium on loan sales attributed to the higher rate environment.

Noninterest Expense

Total noninterest expense for the first quarter of 2022 was $105.1 million, an increase of $2.4 million compared to the fourth quarter of 2021. Total acquisition-related expenses for the quarter were $7.1 million, which compares to the linked quarter of $11.8 million. Taking this into consideration, the largest contributor to the increase in noninterest expense for the current quarter is related to compensation and employee benefits that can be attributed to higher 401k and payroll tax expenses, which are typically elevated in the first quarter. The increase was also attributable to a $500 thousand provision for unfunded loan commitments recorded in the current quarter compared to a $2.0 million recapture recorded for the linked quarter. Higher data processing and software expenses partially offset by lower professional services expense were also drivers of the current quarter increase. Compared to the first quarter of 2021, noninterest expense increased $21.5 million, mostly attributable to an increase in compensation and employee benefits. This increase was due to our acquisition of Bank of Commerce in the fourth quarter of 2021 and the prior-year period having substantial labor costs capitalized related to PPP loan originations. Increased acquisition-related expenses related to legal and professional fees, occupancy and data processing and software also contributed to the increase from the prior-year period.

The provision for unfunded loan commitments, a component of other noninterest expense, for the periods indicated are as follows:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021










(in thousands)

Provision (recapture) for unfunded loan commitments


$               500


$          (2,000)


$           1,500








Net Interest Margin

Columbia's net interest margin (tax equivalent) for the first quarter of 2022 was 3.12%, an increase of 7 basis points from the linked quarter and a decrease of 19 basis points from the prior-year period. The increase in the net interest margin (tax equivalent) compared to the linked quarter was primarily due to higher yields on securities driven by substantially lower premium amortization. A stronger earning assets mix with a lower ratio of low-yield interest-earning deposits with banks was also a contributing factor to the improved net interest margin. The average cost of total deposits for both the current quarter and linked quarter was 4 basis points. The decrease in the net interest margin (tax equivalent) compared to the prior-year period was driven by lower average rates on loans in the current period. For additional information regarding net interest margin, see the "Average Balances and Rates" tables.

Columbia's operating net interest margin (tax equivalent)[1] was 3.15% for the first quarter of 2022, an increase of 7 basis points from the linked quarter and a decrease of 15 basis points compared to the prior-year period. The increase in the operating net interest margin for the first quarter of 2022 compared to the linked quarter and the decrease compared to the prior-year period were due to the items noted in the preceding paragraph.

The following table highlights the yield on our PPP loans for the periods indicated:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Paycheck Protection Program loans


(dollars in thousands)

     Interest income


$        2,462


$        4,876


$        9,097

     Average balance


$    119,548


$    282,542


$    828,051

     Yield


8.35 %


6.85 %


4.46 %








Asset Quality

At March 31, 2022, nonperforming assets to total assets decreased to 0.09% compared to 0.11% at December 31, 2021. Total nonperforming assets decreased $5.6 million from the linked quarter, primarily due to decreases in commercial real estate, commercial business and one-to-four family residential real estate nonaccrual loans.

The following table sets forth information regarding nonaccrual loans and total nonperforming assets:



March 31, 2022


December 31, 2021








(in thousands)

Nonaccrual loans:





Commercial loans:





     Commercial real estate


$                        939


$                    1,872

     Commercial business


10,201


13,321

     Agriculture


5,053


5,396

Consumer loans:





     One-to-four family residential real estate


1,236


2,433

     Other consumer


12


19

     Total nonaccrual loans


17,441


23,041

OREO and other personal property owned


381


381

Total nonperforming assets


$                  17,822


$                  23,422


Nonperforming assets to total loans were 0.16% and 0.22% at March 31, 2022 and December 31, 2021, respectively.

The following table provides an analysis of the Company's allowance for credit losses:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021










(in thousands)

Beginning balance


$       155,578


$       142,785


$       149,140

Initial ACL recorded for PCD loans acquired during the period



2,616


Charge-offs:







Commercial loans:







     Commercial real estate



(728)


     Commercial business


(1,632)


(871)


(3,339)

     Agriculture


(23)


(200)


Consumer loans:







     One-to-four family residential real estate



(24)


     Other consumer


(246)


(355)


(127)

          Total charge-offs


(1,901)


(2,178)


(3,466)

Recoveries:







Commercial loans:







     Commercial real estate


14


63


36

     Commercial business


291


446


3,214

     Agriculture


125


332


12

     Construction


8


18


46

Consumer loans:







     One-to-four family residential real estate


294


150


51

     Other consumer


340


246


61

     Total recoveries


1,072


1,255


3,420

Net charge-offs


(829)


(923)


(46)

Provision (recapture) for credit losses


(7,800)


11,100


(800)

Ending balance


$       146,949


$       155,578


$       148,294


The allowance for credit losses to period-end loans was 1.37% at March 31, 2022 compared to 1.46% at December 31, 2021. Excluding PPP loans, the allowance for credit losses to period-end loans[2] was 1.38% at March 31, 2022 compared to 1.49% at December 31, 2021.

Organizational Update

Umpqua Merger

Integration planning related to the combination with Umpqua Holdings Corporation, which was announced on October 12, 2021, is moving along smoothly under the guidance of an Integration Office co-led by executives from both companies. Shareholders overwhelmingly approved the merger at separate meetings in late January, and we are awaiting regulatory approvals. "Once approvals are granted, we intend to move swiftly towards increasing our capacity and depth of services for the combined client-base," said Clint Stein. "Associates from both companies have been planning and sharing their expertise to ensure a smooth post-closing experience for our clients."

Cash Dividend Announcement

Columbia will pay a regular cash dividend of $0.30 per common share on May 18, 2022 to shareholders of record as of the close of business on May 4, 2022.

Conference Call Information

Columbia's management will discuss the first quarter 2022 financial results on a conference call scheduled for Thursday, April 21, 2022 at 11:00 a.m. Pacific Time (2:00 p.m. ET). Interested parties may join the live-streamed event by using the site:

https://edge.media-server.com/mmc/p/tsvpyaax

The conference call can also be accessed on Thursday, April 21, 2022 at 11:00 a.m. Pacific Time (2:00 p.m. ET) by calling 833-301-1160; Conference ID password: 1141605.

A replay of the call will be accessible beginning Friday, April 22, 2022 using the link below:

https://edge.media-server.com/mmc/p/tsvpyaax

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. (NASDAQ: COLB) is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon, Idaho and California. The bank has been named one of Puget Sound Business Journal's "Washington's Best Workplaces," more than 10 times. Columbia was named on the Forbes 2022 list of "America's Best Banks" marking 11 consecutive years on the publication's list of top financial institutions.

More information about Columbia can be found on its website at www.columbiabank.com.

Note Regarding Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, descriptions of Columbia's management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia's style of banking and the strength of the local economy as well as the potential effects of the COVID-19 pandemic on Columbia's business, operations, financial performance and prospects. The words "will," "believe," "expect," "intend," "should," and "anticipate" or the negative of these words or words of similar construction are intended in part to help identify forward-looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risks and uncertainties, many of which are outside our control, that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in Columbia's filings with the Securities and Exchange Commission (the "SEC"), available at the SEC's website at www.sec.gov and the Company's website at www.columbiabank.com, including the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q (as applicable), factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following:

  • national and global economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth and maintain the quality of our earning assets;
  • the markets where we operate and make loans could face challenges;
  • the risks presented by the economy, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;
  • continued increases in inflation, and the risk that information may differ, possibly materially, from expectations, and actions taken by the Board of Governors of the Federal Reserve System in response to inflation and their potential impact on economic conditions;
  • risks related to the proposed merger with Umpqua including, among others, (i) failure to complete the merger with Umpqua or unexpected delays related to the merger or either party's inability to obtain regulatory or shareholder approvals or satisfy other closing conditions required to complete the merger, (ii) regulatory approvals resulting in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction, (iii) certain restrictions during the pendency of the proposed transaction with Umpqua that may impact the parties' ability to pursue certain business opportunities or strategic transactions, (iv) diversion of management's attention from ongoing business operations and opportunities, (v) cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (vi) the integration of each party's management, personnel and operations will not be successfully achieved or may be materially delayed or will be more costly or difficult than expected, (vii) deposit attrition, customer or employee loss and/or revenue loss as a result of the announcement of the proposed merger, (viii) expenses related to the proposed merger being greater than expected, and (ix) shareholder litigation that may prevent or delay the closing of the proposed merger or otherwise negatively impact the Company's business and operations;
  • the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions (including the recent acquisition of Bank of Commerce and infrastructure may not be realized;
  • the ability to successfully integrate Bank of Commerce, or to integrate future acquired entities;
  • interest rate changes could significantly reduce net interest income and negatively affect asset yields and funding sources;
  • the effect of the discontinuation or replacement of LIBOR;
  • results of operations following strategic expansion, including the impact of acquired loans on our earnings, could differ from expectations;
  • changes in the scope and cost of FDIC insurance and other coverages;
  • changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analysis relating to how such changes will affect our financial results could prove incorrect;
  • changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and regulatory agencies;
  • increased competition among financial institutions and nontraditional providers of financial services;
  • continued consolidation in the financial services industry resulting in the creation of larger financial institutions that have greater resources could change the competitive landscape;
  • the goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital;
  • our ability to identify and address cyber-security risks, including security breaches, "denial of service attacks," "hacking" and identity theft;
  • any material failure or interruption of our information and communications systems;
  • inability to keep pace with technological changes;
  • our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk and regulatory and compliance risk;
  • failure to maintain effective internal control over financial reporting or disclosure controls and procedures;
  • the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia's invasion of Ukraine;
  • our profitability measures could be adversely affected if we are unable to effectively manage our capital;
  • the risks from climate change and its potential to disrupt our business and adversely impact the operations and creditworthiness of our customers;
  • natural disasters, including earthquakes, tsunamis, flooding, fires and other unexpected events;
  • the effect of COVID-19 and other infectious illness outbreaks that may arise in the future, which has created significant impacts and uncertainties in U.S. and global markets;
  • changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, including with regard to COVID-19; and
  • the effects of any damage to our reputation resulting from developments related to any of the items identified above.

Additional factors that could cause results to differ materially from those described above can be found in Columbia's Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and available on Columbia's website, www.columbiabank.com, under the heading "Financial Information" and in other documents Columbia files with the SEC, and in Umpqua's Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and available on Umpqua's investor relations website, www.umpquabank.com, under the heading "Financials," and in other documents Umpqua files with the SEC.

We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements which speak only as of the date hereof. Neither Columbia nor Umpqua assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.

1

Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of operating net interest margin (tax equivalent) to net interest margin.

2

Allowance for credit losses to period-end loans, excluding PPP loans is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of allowance for credit losses to period-end loans to allowance for credit losses to period-end loans, excluding PPP loans.



Contacts:

Clint Stein,


Aaron James Deer,


President and


Executive Vice President and


Chief Executive Officer


Chief Financial Officer






Investor Relations




InvestorRelations@columbiabank.com




253-471-4065




(COLB-ER)



 

CONSOLIDATED BALANCE SHEETS







Columbia Banking System, Inc.








Unaudited





March 31,


December 31,






2022


2021














(in thousands)

ASSETS



Cash and due from banks





$           225,141


$           153,414

Interest-earning deposits with banks





747,335


671,300

          Total cash and cash equivalents





972,476


824,714

Debt securities available for sale at fair value (amortized cost of $5,853,160 and $5,898,041, respectively)


5,527,371


5,910,999

Debt securities held to maturity at amortized cost (fair value of $2,038,037 and $2,122,606, respectively)


2,202,437


2,148,327

Equity securities





13,425


13,425

Federal Home Loan Bank ("FHLB") stock at cost




10,280


10,280

Loans held for sale





4,271


9,774

Loans, net of unearned income





10,759,684


10,641,937

     Less: Allowance for credit losses




146,949


155,578

          Loans, net





10,612,735


10,486,359

Interest receivable





55,940


56,019

Premises and equipment, net





170,055


172,144

Other real estate owned





381


381

Goodwill





823,172


823,172

Other intangible assets, net





32,359


34,647

Other assets





539,056


455,092

          Total assets





$      20,963,958


$      20,945,333

LIABILITIES AND SHAREHOLDERS' EQUITY





Deposits:








Noninterest-bearing





$        8,790,138


$        8,856,714

Interest-bearing





9,509,075


9,153,401

          Total deposits





18,299,213


18,010,115

FHLB advances





7,345


7,359

Securities sold under agreements to repurchase




44,212


86,013

Subordinated debentures





10,000


10,000

Junior subordinated debentures





10,310


10,310

Other liabilities





232,099


232,794

          Total liabilities





18,603,179


18,356,591

Commitments and contingent liabilities








Shareholders' equity:









March 31,


December 31,






2022


2021














(in thousands)





Preferred stock (no par value)








          Authorized shares

2,000


2,000





Common stock (no par value)








          Authorized shares

115,000


115,000





          Issued

80,828


80,695


1,931,076


1,930,187

          Outstanding

78,644


78,511





Retained earnings





728,314


694,227

Accumulated other comprehensive income




(227,777)


35,162

Treasury stock at cost

2,184


2,184


(70,834)


(70,834)

          Total shareholders' equity





2,360,779


2,588,742

          Total liabilities and shareholders' equity




$      20,963,958


$      20,945,333

 

CONSOLIDATED STATEMENTS OF INCOME







Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


March 31,



2022


2021


2021








Interest Income


(in thousands except per share amounts)

Loans


$         107,103


$         110,575


$         100,315

Taxable securities


37,162


33,654


22,816

Tax-exempt securities


3,725


3,447


2,759

Deposits in banks


295


360


152

     Total interest income


148,285


148,036


126,042

Interest Expense







Deposits


1,796


1,807


1,485

FHLB advances and Federal Reserve Bank ("FRB") borrowings


71


74


72

Subordinated debentures


144


561


468

Other borrowings


74


71


23

     Total interest expense


2,085


2,513


2,048

Net Interest Income


146,200


145,523


123,994

Provision (recapture) for credit losses


(7,800)


11,100


(800)

     Net interest income after provision (recapture) for credit losses


154,000


134,423


124,794

Noninterest Income







Deposit account and treasury management fees


7,113


7,155


6,358

Card revenue


4,967


5,108


3,733

Financial services and trust revenue


4,632


3,877


3,381

Loan revenue


3,193


4,977


7,369

Bank owned life insurance


1,788


1,753


1,560

Other


2,487


1,370


765

     Total noninterest income


24,180


24,240


23,166

Noninterest Expense







Compensation and employee benefits


63,079


64,169


51,736

Occupancy


11,009


10,076


9,006

Data processing and software


10,324


9,130


8,451

Legal and professional fees


6,535


7,937


2,815

Amortization of intangibles


2,288


2,376


1,924

Business and Occupation ("B&O") taxes


1,589


1,571


1,259

Advertising and promotion


726


1,357


760

Regulatory premiums


1,536


1,481


1,105

Net cost (benefit) of operation of other real estate owned


10


14


(63)

Other


7,957


4,511


6,566

     Total noninterest expense


105,053


102,622


83,559

Income before income taxes


73,127


56,041


64,401

Provision for income taxes


15,605


13,130


12,548

Net Income


$           57,522


$           42,911


$           51,853

Earnings per common share







     Basic


$               0.74


$               0.55


$               0.73

     Diluted


$               0.74


$               0.55


$               0.73

Dividends declared per common share (1)


$               0.30


$                  —


$               0.28








Weighted average number of common shares outstanding


77,925


77,784


70,869

Weighted average number of diluted common shares outstanding


78,083


77,977


71,109



__________

(1)

The dividend based on third quarter earnings was declared on September 30, 2021. As a result, there were two dividend declarations made during the third quarter of 2021 and none during the three months ended December 31, 2021.



 

FINANCIAL STATISTICS







Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


March 31,



2022


2021


2021








Earnings


(dollars in thousands except per share amounts)

     Net interest income


$       146,200


$       145,523


$       123,994

     Provision (recapture) for credit losses


$          (7,800)


$         11,100


$             (800)

     Noninterest income


$         24,180


$         24,240


$         23,166

     Noninterest expense


$       105,053


$       102,622


$         83,559

     Acquisition-related expense (included in noninterest expense)


$           7,057


$         11,812


$                —

     Net income


$         57,522


$         42,911


$         51,853

Per Common Share







     Earnings (basic)


$             0.74


$             0.55


$             0.73

     Earnings (diluted)


$             0.74


$             0.55


$             0.73

     Book value


$           30.02


$           32.97


$           31.71

     Tangible book value per common share (1)


$           19.14


$           22.05


$           20.69

Averages







     Total assets


$   20,955,666


$   20,857,983


$   16,891,682

     Interest-earning assets


$   19,266,644


$   19,186,398


$   15,419,371

     Loans


$   10,665,242


$   10,545,172


$     9,586,984

     Securities, including debt securities, equity securities and FHLB stock


$     8,010,607


$     7,693,659


$     5,230,304

     Deposits


$   18,097,872


$   17,935,311


$   14,212,616

     Interest-bearing deposits


$     9,402,040


$     9,147,184


$     7,121,300

     Interest-bearing liabilities


$     9,495,579


$     9,255,214


$     7,217,471

     Noninterest-bearing deposits


$     8,695,832


$     8,788,127


$     7,091,316

     Shareholders' equity


$     2,535,376


$     2,584,110


$     2,346,593

Financial Ratios







     Return on average assets


1.10 %


0.82 %


1.23 %

     Return on average common equity


9.08 %


6.64 %


8.84 %

     Return on average tangible common equity (1)


14.14 %


10.36 %


13.73 %

     Average equity to average assets


12.10 %


12.39 %


13.89 %

     Shareholders' equity to total assets


11.26 %


12.36 %


13.12 %

     Tangible common shareholders' equity to tangible assets (1)


7.49 %


8.62 %


8.97 %

     Net interest margin (tax equivalent)


3.12 %


3.05 %


3.31 %

     Efficiency ratio (tax equivalent) (2)


60.75 %


59.57 %


55.90 %

     Operating efficiency ratio (tax equivalent) (1)


55.42 %


51.48 %


55.30 %

     Noninterest expense ratio


2.01 %


1.97 %


1.98 %

     Core noninterest expense ratio (1)


1.87 %


1.74 %


1.98 %










March 31,


December 31,



Period-end


2022


2021



     Total assets


$   20,963,958


$   20,945,333



     Loans, net of unearned income


$   10,759,684


$   10,641,937



     Allowance for credit losses


$        146,949


$        155,578



     Securities, including debt securities, equity securities and FHLB stock


$     7,753,513


$     8,083,031



     Deposits


$   18,299,213


$   18,010,115



     Shareholders' equity


$     2,360,779


$     2,588,742



Nonperforming assets







     Nonaccrual loans


$          17,441


$          23,041



     Other real estate owned ("OREO") and other personal property owned ("OPPO")


381


381



          Total nonperforming assets


$          17,822


$          23,422










     Nonperforming loans to period-end loans


0.16 %


0.22 %



     Nonperforming assets to period-end assets


0.09 %


0.11 %



     Allowance for credit losses to period-end loans


1.37 %


1.46 %



     Net loan charge-offs (for the three months ended)


$               829


$               923





__________

(1)

This is a non-GAAP measure. See section titled "Non-GAAP Financial Measures" on the last three pages of this earnings release for a reconciliation to the most comparable GAAP measure.

(2)

Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis.



 

QUARTERLY FINANCIAL STATISTICS











Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


September 30,


June 30,


March 31,



2022


2021


2021


2021


2021












Earnings


(dollars in thousands except per share amounts)

     Net interest income


$      146,200


$      145,523


$      132,540


$      125,462


$      123,994

     Provision (recapture) for credit losses


$         (7,800)


$        11,100


$               —


$         (5,500)


$           (800)

     Noninterest income


$        24,180


$        24,240


$        23,958


$        22,730


$        23,166

     Noninterest expense


$      105,053


$      102,622


$        90,007


$        84,116


$        83,559

     Acquisition-related expense (included in noninterest expense)


$          7,057


$        11,812


$          2,192


$             510


$              —

     Net income


$        57,522


$        42,911


$        53,017


$        55,039


$        51,853

Per Common Share











     Earnings (basic)


$            0.74


$            0.55


$            0.75


$            0.77


$           0.73

     Earnings (diluted)


$            0.74


$            0.55


$            0.74


$            0.77


$           0.73

     Book value


$          30.02


$          32.97


$          32.38


$          32.52


$         31.71

Averages











     Total assets


$ 20,955,666


$ 20,857,983


$ 18,330,109


$ 17,670,480


$ 16,891,682

     Interest-earning assets


$ 19,266,644


$ 19,186,398


$ 16,820,771


$ 16,176,328


$ 15,419,371

     Loans


$ 10,665,242


$ 10,545,172


$   9,526,052


$   9,664,169


$   9,586,984

     Securities, including debt securities, equity securities and FHLB stock


$   8,010,607


$   7,693,659


$   6,545,134


$   5,914,838


$   5,230,304

     Deposits


$ 18,097,872


$ 17,935,311


$ 15,642,250


$ 15,059,406


$ 14,212,616

     Interest-bearing deposits


$   9,402,040


$   9,147,184


$   7,821,949


$   7,530,372


$   7,121,300

     Interest-bearing liabilities


$   9,495,579


$   9,255,214


$   7,920,146


$   7,618,629


$   7,217,471

     Noninterest-bearing deposits


$   8,695,832


$   8,788,127


$   7,820,301


$   7,529,034


$   7,091,316

     Shareholders' equity


$   2,535,376


$   2,584,110


$   2,364,149


$   2,312,779


$   2,346,593

Financial Ratios











     Return on average assets


1.10 %


0.82 %


1.16 %


1.25 %


1.23 %

     Return on average common equity


9.08 %


6.64 %


8.97 %


9.52 %


8.84 %

     Average equity to average assets


12.10 %


12.39 %


12.90 %


13.09 %


13.89 %

     Shareholders' equity to total assets


11.26 %


12.36 %


12.49 %


12.95 %


13.12 %

     Net interest margin (tax equivalent)


3.12 %


3.05 %


3.17 %


3.16 %


3.31 %

Period-end











     Total assets


$ 20,963,958


$ 20,945,333


$ 18,602,462


$ 18,013,477


$ 17,335,116

     Loans, net of unearned income


$ 10,759,684


$ 10,641,937


$   9,521,385


$   9,693,116


$   9,676,318

     Allowance for credit losses


$      146,949


$      155,578


$      142,785


$      142,988


$      148,294

     Securities, including debt securities, equity securities and FHLB stock


$   7,753,513


$   8,083,031


$   6,930,782


$   6,238,486


$   5,519,995

     Deposits


$ 18,299,213


$ 18,010,115


$ 15,953,399


$ 15,345,432


$ 14,767,466

     Shareholders' equity


$   2,360,779


$   2,588,742


$   2,323,267


$   2,333,246


$   2,275,063

     Goodwill


$      823,172


$      823,172


$      765,842


$      765,842


$      765,842

     Other intangible assets, net


$        32,359


$        34,647


$        21,123


$        22,958


$        24,810

Nonperforming assets











     Nonaccrual loans


$        17,441


$        23,041


$        24,176


$        24,021


$        33,581

     OREO and OPPO


381


381


381


381


521

          Total nonperforming assets


$        17,822


$        23,422


$        24,557


$        24,402


$        34,102












     Nonperforming loans to period-end loans


0.16 %


0.22 %


0.25 %


0.25 %


0.35 %

     Nonperforming assets to period-end assets


0.09 %


0.11 %


0.13 %


0.14 %


0.20 %

     Allowance for credit losses to period-end loans


1.37 %


1.46 %


1.50 %


1.48 %


1.53 %

     Net loan charge-offs (recoveries)


$            829


$            923


$            203


$           (194)


$              46

 

LOAN PORTFOLIO COMPOSITION











Columbia Banking System, Inc.











Unaudited


March 31,


December 31,


September 30,


June 30,


March 31,



2022


2021


2021


2021


2021












Loan Portfolio Composition - Dollars


(dollars in thousands)

Commercial loans:











          Commercial real estate


$    5,047,472


$    4,981,263


$    4,088,484


$    4,101,071


$    4,081,915

          Commercial business


3,492,307


3,423,268


3,436,351


3,738,288


3,792,813

          Agriculture


765,319


795,715


815,985


797,580


751,800

          Construction


409,242


384,755


326,569


300,303


282,534

Consumer loans:











          One-to-four family residential real estate


1,003,157


1,013,908


823,877


724,151


735,314

          Other consumer


42,187


43,028


30,119


31,723


31,942

     Total loans


10,759,684


10,641,937


9,521,385


9,693,116


9,676,318

Less:  Allowance for credit losses


(146,949)


(155,578)


(142,785)


(142,988)


(148,294)

     Total loans, net


$  10,612,735


$  10,486,359


$    9,378,600


$    9,550,128


$    9,528,024

     Loans held for sale


$           4,271


$           9,774


$         11,355


$         13,179


$         26,176












 



March 31,


December 31,


September 30,


June 30,


March 31,

Loan Portfolio Composition - Percentages


2022


2021


2021


2021


2021

          Commercial loans:











          Commercial real estate


46.9 %


46.8 %


42.9 %


42.3 %


42.2 %

          Commercial business


32.5 %


32.2 %


36.1 %


38.6 %


39.2 %

          Agriculture


7.1 %


7.5 %


8.6 %


8.2 %


7.8 %

          Construction


3.8 %


3.6 %


3.4 %


3.1 %


2.9 %

Consumer loans:











          One-to-four family residential real estate


9.3 %


9.5 %


8.7 %


7.5 %


7.6 %

          Other consumer


0.4 %


0.4 %


0.3 %


0.3 %


0.3 %

     Total loans


100.0 %


100.0 %


100.0 %


100.0 %


100.0 %

 

DEPOSIT COMPOSITION











Columbia Banking System, Inc.











Unaudited













March 31,


December 31,


September 30,


June 30,


March 31,



2022


2021


2021


2021


2021












Deposit Composition - Dollars


(dollars in thousands)

Demand and other noninterest-bearing


$  8,790,138


$  8,856,714


$  7,971,680


$  7,703,325


$  7,424,472

Money market


3,501,723


3,525,299


3,076,833


2,950,063


2,913,689

Interest-bearing demand


2,103,053


1,999,407


1,646,816


1,525,360


1,512,808

Savings


1,637,451


1,617,546


1,416,376


1,388,241


1,282,151

Interest-bearing public funds, other than certificates of deposit


775,048


779,146


740,281


720,553


662,461

Certificates of deposit, less than $250,000


239,863


249,120


190,402


193,080


198,568

Certificates of deposit, $250,000 or more


145,372


160,490


108,483


105,393


107,421

Certificates of deposit insured by the CD Option of IntraFi Network Deposits


32,608


35,611


26,835


24,409


25,929

Brokered certificates of deposit




5,000


5,000


5,000

Reciprocal money market accounts


1,073,405


786,046


770,693


730,008


634,967

     Subtotal


18,298,661


18,009,379


15,953,399


15,345,432


14,767,466

          Valuation adjustment resulting from acquisition accounting


552


736




     Total deposits


$ 18,299,213


$ 18,010,115


$ 15,953,399


$ 15,345,432


$ 14,767,466

 



March 31,


December 31,


September 30,


June 30,


March 31,

Deposit Composition - Percentages


2022


2021


2021


2021


2021

Demand and other noninterest-bearing


48.1 %


49.1 %


50.0 %


50.2 %


50.4 %

Money market


19.1 %


19.6 %


19.3 %


19.2 %


19.7 %

Interest-bearing demand


11.5  %


11.1  %


10.3 %


9.9 %


10.2 %

Savings


8.9 %


9.0 %


8.9 %


9.0 %


8.7 %

Interest-bearing public funds, other than certificates of deposit


4.2 %


4.3 %


4.6 %


4.7 %


4.5 %

Certificates of deposit, less than $250,000


1.3 %


1.4 %


1.2 %


1.3 %


1.3 %

Certificates of deposit, $250,000 or more


0.8 %


0.9 %


0.7 %


0.7 %


0.7 %

Certificates of deposit insured by the CD Option of IntraFi Network Deposits


0.2 %


0.2 %


0.2 %


0.2 %


0.2 %

Reciprocal money market accounts


5.9 %


4.4 %


4.8 %


4.8 %


4.3 %

     Total


100.0 %


100.0 %


100.0 %


100.0 %


100.0 %

 

AVERAGE BALANCES AND RATES











Columbia Banking System, Inc.











Unaudited















Three Months Ended


Three Months Ended



March 31, 2022


March 31, 2021



Average

Balances


Interest

Earned / Paid


Average

Rate


Average

Balances


Interest

Earned / Paid


Average

Rate
















(dollars in thousands)

ASSETS













Loans, net (1)(2)


$ 10,665,242


$       108,181


4.11  %


$    9,586,984


$       101,477


4.29 %

Taxable securities


7,217,844


37,162


2.09 %


4,624,175


22,816


2.00 %

Tax exempt securities (2)


792,763


4,715


2.41 %


606,129


3,492


2.34 %

Interest-earning deposits with banks


590,795


295


0.20 %


602,083


152


0.10 %

          Total interest-earning assets


19,266,644


150,353


3.16 %


15,419,371


127,937


3.36 %

Other earning assets


302,865






242,684





Noninterest-earning assets


1,386,157






1,229,627





          Total assets


$ 20,955,666






$ 16,891,682





LIABILITIES AND SHAREHOLDERS' EQUITY

Money market accounts


$    4,530,698


$               960


0.09 %


$    3,450,750


$               699


0.08 %

Interest-bearing demand


2,024,757


374


0.07 %


1,449,642


265


0.07 %

Savings accounts


1,632,369


77


0.02 %


1,221,431


40


0.01 %

Interest-bearing public funds, other than certificates of deposit


776,965


288


0.15 %


663,158


276


0.17 %

Certificates of deposit


437,251


97


0.09 %


336,319


205


0.25 %

          Total interest-bearing deposits


9,402,040


1,796


0.08 %


7,121,300


1,485


0.08 %

FHLB advances and FRB borrowings


7,354


71


3.92 %


7,408


72


3.94 %

Subordinated debentures


10,000


144


5.84 %


35,072


468


5.41 %

Other borrowings and interest-bearing liabilities


76,185


74


0.39 %


53,691


23


0.17 %

          Total interest-bearing liabilities


9,495,579


2,085


0.09 %


7,217,471


2,048


0.12 %

Noninterest-bearing deposits


8,695,832






7,091,316





Other noninterest-bearing liabilities


228,879






236,302





Shareholders' equity


2,535,376






2,346,593





          Total liabilities & shareholders' equity


$ 20,955,666






$ 16,891,682





Net interest income (tax equivalent)


$       148,268






$       125,889



Net interest margin (tax equivalent)


3.12 %






3.31 %



__________

(1)

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $4.2 million and $8.3 million for the three months ended March 31, 2022 and 2021, respectively. The net incremental amortization on acquired loans was $350 thousand for the three months ended March 31, 2022 compared to net incremental accretion of $1.1 million for the three months ended March 31, 2021.

(2)

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.1 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $990 thousand and $733 thousand for the three months ended March 31, 2022 and 2021, respectively.



 

AVERAGE BALANCES AND RATES











Columbia Banking System, Inc.











Unaudited















Three Months Ended


Three Months Ended



March 31, 2022


December 31, 2021



Average

Balances


Interest

Earned / Paid


Average

Rate


Average

Balances


Interest

Earned / Paid


Average

Rate
















(dollars in thousands)

ASSETS













Loans, net (1)(2)


$ 10,665,242


$       108,181


4.11  %


$ 10,545,172


$       111,709


4.20 %

Taxable securities


7,217,844


37,162


2.09 %


6,934,477


33,654


1.93 %

Tax exempt securities (2)


792,763


4,715


2.41 %


759,182


4,364


2.28 %

Interest-earning deposits with banks


590,795


295


0.20 %


947,567


360


0.15 %

          Total interest-earning assets


19,266,644


150,353


3.16 %


19,186,398


150,087


3.10 %

Other earning assets


302,865






276,828





Noninterest-earning assets


1,386,157






1,394,757





          Total assets


$ 20,955,666






$ 20,857,983





LIABILITIES AND SHAREHOLDERS' EQUITY

Money market accounts


$    4,530,698


$               960


0.09 %


$    4,339,959


$               951


0.09 %

Interest-bearing demand


2,024,757


374


0.07 %


1,967,559


376


0.08 %

Savings accounts


1,632,369


77


0.02 %


1,593,434


78


0.02 %

Interest-bearing public funds, other than certificates of deposit


776,965


288


0.15 %


787,395


252


0.13 %

Certificates of deposit


437,251


97


0.09 %


458,837


150


0.13 %

          Total interest-bearing deposits


9,402,040


1,796


0.08 %


9,147,184


1,807


0.08 %

FHLB advances and FRB borrowings


7,354


71


3.92 %


7,368


74


3.98 %

Subordinated debentures


10,000


144


5.84 %


43,859


561


5.07 %

Other borrowings and interest-bearing liabilities


76,185


74


0.39 %


56,803


71


0.50 %

          Total interest-bearing liabilities


9,495,579


2,085


0.09 %


9,255,214


2,513


0.11  %

Noninterest-bearing deposits


8,695,832






8,788,127





Other noninterest-bearing liabilities


228,879






230,532





Shareholders' equity


2,535,376






2,584,110





          Total liabilities & shareholders' equity


$ 20,955,666






$ 20,857,983





Net interest income (tax equivalent)


$       148,268






$       147,574



Net interest margin (tax equivalent)


3.12 %






3.05 %



__________

(1)

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $4.2 million and $6.2 million for the three months ended March 31, 2022 and December 31, 2021, respectively. The net incremental amortization on acquired loans was $350 thousand for the three months ended March 31, 2022 compared to net incremental accretion of $16 thousand for the three months ended December 31, 2021.

(2)

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.1 million for both the three months ended March 31, 2022 and December 31, 2021. The tax equivalent yield adjustment to interest earned on tax exempt securities was $990 thousand and $917 thousand for the three months ended March 31, 2022 and December 31, 2021, respectively.



 

Non-GAAP Financial Measures

The Company considers its operating net interest margin (tax equivalent) and operating efficiency ratios to be useful measurements as they more closely reflect the ongoing operating performance of the Company. Despite the usefulness of the operating net interest margin (tax equivalent) and operating efficiency ratio to the Company, there are no standardized definitions for these metrics. As a result, the Company's calculations may not be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following tables reconcile the Company's calculation of the operating net interest margin (tax equivalent) and operating efficiency ratio:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Operating net interest margin non-GAAP reconciliation:


(dollars in thousands)

Net interest income (tax equivalent) (1)


$        148,268


$        147,574


$        125,889

Adjustments to arrive at operating net interest income (tax equivalent):







     Premium amortization (discount accretion) on acquired loans


350


(16)


(1,055)

     Premium amortization on acquired securities


1,031


1,278


520

Operating net interest income (tax equivalent) (1)


$        149,649


$        148,836


$        125,354








Average interest earning assets


$   19,266,644


$   19,186,398


$   15,419,371

Net interest margin (tax equivalent) (1)


3.12  %


3.05  %


3.31  %

Operating net interest margin (tax equivalent) (1)


3.15  %


3.08  %


3.30  %

 



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Operating efficiency ratio non-GAAP reconciliation:


(dollars in thousands)

Noninterest expense (numerator A)


$       105,053


$       102,622


$         83,559

Adjustments to arrive at operating noninterest expense:







     Acquisition-related expenses


(7,057)


(11,812)


     Net benefit (cost) of operation of OREO and OPPO


(10)


(14)


73

     Loss on asset disposals


(29)


(10)


(6)

     B&O taxes


(1,589)


(1,571)


(1,259)

Operating noninterest expense (numerator B)


$         96,368


$         89,215


$         82,367








Net interest income (tax equivalent) (1)


$       148,268


$       147,574


$       125,889

Noninterest income


24,180


24,240


23,166

Bank owned life insurance tax equivalent adjustment


475


466


415

Total revenue (tax equivalent) (denominator A)


$       172,923


$       172,280


$       149,470








Operating net interest income (tax equivalent) (1)


$       149,649


$       148,836


$       125,354

Adjustments to arrive at operating noninterest income (tax equivalent):







     Gain on asset disposals


(414)


(242)


Operating noninterest income (tax equivalent)


24,241


24,464


23,581

Total operating revenue (tax equivalent) (denominator B)


$       173,890


$       173,300


$       148,935

Efficiency ratio (tax equivalent) (numerator A/denominator A)


60.75 %


59.57 %


55.90 %

Operating efficiency ratio (tax equivalent) (numerator B/denominator B)


55.42 %


51.48 %


55.30 %



__________

(1)

Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $2.1 million for both the three months ended March 31, 2022 and December 31, 2021, respectively, and $1.9 million for the three months ended March 31, 2021.



Non-GAAP Financial Measures - Continued

The Company also considers its core noninterest expense ratio to be a useful measurement as it more closely reflects the ongoing operating performance of the Company. Despite the usefulness of the core noninterest expense ratio to the Company, there is not a standardized definition for it, as a result, the Company's calculations may not be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the core noninterest expense ratio:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Core noninterest expense ratio non-GAAP reconciliation:


(dollars in thousands)

Noninterest expense (numerator A)


$        105,053


$        102,622


$          83,559

Adjustments to arrive at core noninterest expense:







     Acquisition-related expenses


(7,057)


(11,812)


Core noninterest expense (numerator B)


$          97,996


$          90,810


$          83,559








Average assets (denominator)


$   20,955,666


$   20,857,983


$   16,891,682

Noninterest expense ratio (numerator A/denominator) (1)


2.01  %


1.97  %


1.98  %

Core noninterest expense ratio (numerator B/denominator)


1.87  %


1.74  %


1.98  %



__________

(1)

For the purpose of this ratio, interim noninterest expense has been annualized.

(2)

For the purpose of this ratio, interim core noninterest expense has been annualized.



The Company considers its pre-tax, pre-provision income to be a useful measurement in evaluating the earnings of the Company as it provides a method to assess income. Despite the usefulness of this measure to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the pre-tax, pre-provision income:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Pre-tax, pre-provision income:


(in thousands)

Income before income taxes


$            73,127


$            56,041


$            64,401

     Provision (recapture) for credit losses


(7,800)


11,100


(800)

     Provision (recapture) for unfunded commitments


500


(2,000)


1,500

     B&O taxes


1,589


1,571


1,259

Pre-tax, pre-provision income


$            67,416


$            66,712


$            66,360


Non-GAAP Financial Measures - Continued

The Company considers its tangible common equity ratio and tangible book value per share ratio to be useful measurements in evaluating the capital adequacy of the Company as they provide a method to assess management's success in utilizing our tangible capital. Despite the usefulness of these ratios to the Company, there is not a standardized definition for these metrics. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the tangible common equity ratio and tangible book value per share ratio:



March 31,


December 31,


March 31,



2022


2021


2021








Tangible common equity ratio and tangible book value per common share non-GAAP reconciliation:


(dollars in thousands except per share amounts)

Shareholders' equity (numerator A)


$   2,360,779


$   2,588,742


$  2,275,063

Adjustments to arrive at tangible common equity:







     Goodwill


(823,172)


(823,172)


(765,842)

     Other intangible assets, net


(32,359)


(34,647)


(24,810)

          Tangible common equity (numerator B)


$   1,505,248


$   1,730,923


$   1,484,411








Total assets (denominator A)


$ 20,963,958


$ 20,945,333


$ 17,335,116

Adjustments to arrive at tangible assets:







     Goodwill


(823,172)


(823,172)


(765,842)

     Other intangible assets, net


(32,359)


(34,647)


(24,810)

          Tangible assets (denominator B)


$ 20,108,427


$ 20,087,514


$ 16,544,464








Shareholders' equity to total assets (numerator A/denominator A)


11.26 %


12.36 %


13.12 %

Tangible common shareholders' equity to tangible assets (numerator B/denominator B)


7.49 %


8.62 %


8.97 %

          Common shares outstanding (denominator C)


78,644


78,511


71,739

Book value per common share (numerator A/denominator C)


$          30.02


$          32.97


$          31.71

Tangible book value per common share (numerator B/denominator C)


$          19.14


$          22.05


$          20.69








The Company considers its ratio of allowance for credit losses to period-end loans, excluding PPP loans, to be a useful measurement in evaluating the adequacy of the amount of allowance for credit losses to loans of the Company, as PPP loans are guaranteed by the U.S. Small Business Administration and thus do not require the same amount of reserve for credit losses as do other loans. Despite the usefulness of this ratio to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the allowance for credit losses to period-end loans, excluding PPP loans:



March 31,


December 31,


March 31,



2022


2021


2021








Allowance coverage ratio non-GAAP reconciliation:


(dollars in thousands)

Allowance for credit losses ("ACL") (numerator)


$      146,949


$      155,578


$     148,294








     Total loans (denominator A)


10,759,684


10,641,937


9,676,318

     Less: PPP loans (0% Allowance)


83,196


184,132


894,080

     Total loans, net of PPP loans (denominator B)


$ 10,676,488


$ 10,457,805


$  8,782,238








ACL to period end loans (numerator / denominator A)


1.37 %


1.46 %


1.53 %

ACL to period end loans, excluding PPP loans (numerator / denominator B)


1.38 %


1.49 %


1.69 %








Non-GAAP Financial Measures - Continued

The Company also considers its return on average tangible common equity ratio to be a useful measurement as it evaluates the Company's ongoing ability to generate returns for its common shareholders. By removing the impact of intangible assets and their related amortization and tax effects, the performance of the business can be evaluated, whether acquired or developed internally. Despite the usefulness of this ratio to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the return on average tangible common shareholders' equity ratio:



Three Months Ended



March 31,


December 31,


March 31,



2022


2021


2021








Return on average tangible common equity non-GAAP reconciliation:


(dollars in thousands)

Net income (numerator A)


$          57,522


$          42,911


$          51,853

Adjustments to arrive at tangible income applicable to common shareholders:







     Amortization of intangibles


2,288


2,376


1,924

     Tax effect on intangible amortization


(481)


(499)


(404)

Tangible income applicable to common shareholders (numerator B)


$          59,329


$          44,788


$          53,373








Average shareholders' equity (denominator A)


$     2,535,376


$     2,584,110


$     2,346,593

Adjustments to arrive at average tangible common equity:







     Average intangibles


(857,031)


(854,985)


(791,714)

Average tangible common equity (denominator B)


$     1,678,345


$     1,729,125


$     1,554,879








Return on average common equity (numerator A/denominator A) (1)


9.08  %


6.64  %


8.84  %

Return on average tangible common equity (numerator B/denominator B) (2)


14.14  %


10.36  %


13.73  %


____________________

(1)

For the purpose of this ratio, interim net income has been annualized.

(2)

For the purpose of this ratio, interim tangible income applicable to common shareholders has been annualized.


 

 

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SOURCE Columbia Banking System, Inc.

FAQ

What was Columbia Banking System's net income for Q1 2022?

Columbia Banking System reported a net income of $57.5 million for the first quarter of 2022.

What is the dividend amount for Columbia Banking System in May 2022?

Columbia Banking System declared a cash dividend of $0.30 per share, payable on May 18, 2022.

What was the total loan production for Columbia Banking System in Q1 2022?

Columbia Banking System achieved record non-PPP loan production of $464.2 million in the first quarter of 2022.

How much did Columbia Banking System's deposits increase in Q1 2022?

Deposits increased by $289.1 million during the first quarter of 2022.

What is the net interest margin for Columbia Banking System for Q1 2022?

The net interest margin for Columbia Banking System for the first quarter of 2022 was 3.12%.

Columbia Banking Systems Inc

NASDAQ:COLB

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Banks - Regional
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United States of America
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